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EDGAR FILINGS

Year 2006 / October 20

FREESTAR TECHNOLOGY CORPORATION (FSRT.OB)

Sale of Equity

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.

On October 17, 2005, the Company issued the following unregistered (restricted) securities of the company to Paul Egan, Ciaran Egan, and Fionn Stakelum for services rendered to the company, as follows:

Paul Egan: 2,000,000 shares of Series B preferred stock. 1,000,000 shares of Series A preferred stock

Ciaran Egan: 1,500,000 shares of Series B preferred stock.

Fionn Stakelum: 500,000 shares of Series B preferred stock.

The Company discovered that the Certificates of Designation for the Series A and Series B preferred stock of the Company had inadvertently not been filed before this stock was issued. Thereafter, the Certificates of Designation were filed with the Nevada Secretary of State on June 22, 2005 (see Exhibits 4.1 and 4.2). Since Nevada law requires that such Certificates be filed before this stock issued, the Company received back and cancelled all of the preferred stock that had been issued by the Company and new preferred stock certificates were then issued (as set forth above).

The Series A preferred stock was originally issued with the intention that it would be convertible into 12 shares of common stock, provided certain financial goals were met by the Company (which have not been met). However, with the one for seven reverse split of the Company's common stock, effective on November 8, 2004, this reduced the convertibility of this stock down to 1.71 to one.

The Series B preferred stock that was issued prior to November 8, 2004 (1,000,000 shares for Paul Egan, 1,000,000 shares for Ciaran Egan, and 500,000 shares for Fionn Stakelum) was originally issued with the intention that it would be convertible into 12 shares of common stock, with no restrictions. However, with the one for seven reverse split of the Company's common stock, effective on November 8, 2004, this reduced the convertibility of these 2,500,000 shares down to 1.71 to one. The other 1,500,000 shares of Series B preferred stock issued on February 21, 2005 were not affected by the reverse split.